Felipe Medalla is the new governor of the Philippine central banking. He suggested that anyone who has invested in bitcoin or other cryptocurrencies may be a follower of The Greater Fool Theory. He also argued that people investing in cryptocurrencies are doing so because they want to “hide their money from the government.”
A ‘Very Scary’ Investment Strategy
Felipe Medalla (the new Bangko Sentral ng Pilipinas governor) claimed that Bitcoin investors buy cryptocurrency only because they believe that another person will purchase the exact same digital asset for a lower price. According to Medalla, who spoke at a virtual roundtable discussion that was organized by a local media outlet, such an investment strategy is “very scary.”
As reported by Business World Medalla thinks that cryptocurrency’s value proposition rests on the “Greater Fool Theory.” According to Investopedia, the theory asserts that prices go up because investors can sell overpriced securities to other investors or the “greater fools.” Investors subscribing to this theory are known to ignore valuations, earnings reports, and all the other data.
Cryptocurrency to hide funds
He explained that in addition to Bill Gates’ Greater Fool Theory claims recently made, the BSP governor declared that cryptocurrency is a good investment option for people looking to conceal their assets. He explained:
It is an innovative tool which allows one to accomplish this. It is not uncommon for people to want their money hidden from the authorities.
The BSP has not yet issued regulations regarding cryptocurrencies. However, guidelines have been published that will require virtual asset services providers (VASPs), to apply for a license. Medalla was also mentioned in the report as approving the use of Know Your Customer (KYC and Anti-Money Laundering policies for VASPs.
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